Tata Communications seeking buyers for Neotel

After the sale transaction of Neotel to Vodacom collapsed, Tata Communications is seeking a new owner for its fixed-line telecom unit in South Africa as part of its continued effort to cut its $1.5 billion debt.Reeba Zachariah | TNN | March 15, 2016, 18:04 IST

Mumbai: After the sale transaction of Neotel to Vodacom collapsed, Tata Communications is seeking a new owner for its fixed-line telecom unit in South Africa as part of its continued effort to cut its $1.5 billion debt.

The Vinod Kumar-led company owns over 68% shares of Neotel, which no longer fits with Tata Communications’ long-term business play. Parties have shown interest in Neotel and Tata Communications’ intention is to exit the company, Kumar had stated.

The Neotel-Vodacom deal, originally signed in May 2014 for $676 million, was terminated recently as the transaction was stuck in a regulatory quagmire.

Besides Neotel, Tata Communications will be offloading its interest in the data centre business. It is in advanced talks with Singapore Technologies Telemedia for the data centre unit, which is valued at over $700 million.

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“There will be a new brand identity — work has started on it,” a senior consultant working on the merged company’s new identity said, speaking on the condition of anonymity due to non-disclosure agreements.